The U.S. President’s recent show of support for Tesla and CEO Elon Musk might inadvertently worsen the electric carmaker’s current challenges. Despite intentions to boost investor confidence, Trump’s efforts could backfire by further alienating potential buyers and exacerbating the existing political tensions surrounding the brand. This is unfolding amid a downturn in Tesla’s stock and growing concerns about its sales.
Financial analyst Dan Ives of Wedbush Securities stated, “Tesla is becoming a political symbol of Trump and DOGE, and that is a bad thing for the brand.” DOGE refers to the Department of Government Efficiency, a governmental group with the intent of cutting government spending. Ives suggests that Trump’s endorsement, intended to help, could instead be detrimental to Tesla’s public image and investor perception.
In a post on his Truth Social platform, Trump expressed support for Musk, claiming that “Radical Left Lunatics” were attempting to boycott Tesla. This message followed a significant single-day sell-off of Tesla stock. While the stock saw a slight increase during trading on Tuesday, the underlying issues remained.
Tesla has faced considerable headwinds this year, including increased competition in the electric vehicle market, most notably from China, and growing controversy surrounding Musk’s political associations. Shares have dropped precipitously, with a 45% decline in 2025, contributing to investor pessimism.
Many analysts attribute Tesla’s stock and sales struggles to Musk’s well-known support for Trump and other right-wing figures. Protests and vandalism targeting Tesla showrooms in the U.S. have become increasingly common, underscoring the divisiveness of the situation. Some Tesla owners have even placed bumper stickers on their cars, expressing concerns about Musk’s actions.
Federal prosecutors have charged a woman in Colorado for vandalism against a Tesla dealership, which included Molotov cocktails and spray-painted messages reading “Nazi cars”.
Musk’s actions, including a $270 million donation to Trump’s 2024 campaign, his appearance on stage with Trump, and his celebration of Trump’s victory over Kamala Harris, have seemingly affected the brand. While Tesla stock briefly soared to $479 per share, currently trading at around $230 per share shows a substantial drop.
This decline potentially hurts the company in two main ways. Incentives offered to workers in the form of discounted stock purchases are now less valuable since the offered price might be higher than the current market price. Secondly, a lower stock price limits the company’s ability to raise capital by selling new shares for research and expansion.
Musk has become associated with the Trump administration’s government restructuring efforts. This is further complicated by public perception that potential Tesla buyers are typically wealthy and progressive consumers.
Tesla’s sales have dropped dramatically in California, its largest U.S. market, and the company recorded its first annual global sales decline last year. Sales in Europe also fell significantly. Sales in Germany and France were especially affected.
Recent figures from China reveal that Tesla’s sales there have nearly halved from the previous year, partly due to growing competition from domestic EV companies. In the U.S., sales have been affected by increased competition and a politically divided market.
Analysts at UBS Global Research expect Tesla deliveries to drop by 5% in the first quarter and the full year compared to 2024. Their research indicates softer demand, citing low delivery times for Tesla models in key markets.
Beyond his backing of Trump, Musk has shown support for far-right political entities. Actions such as these, along with controversial statements, appear to have hurt Tesla’s brand.
Tesla isn’t the only company led by Musk experiencing difficulties. His X social media platform faced service failures, prompting cybersecurity concerns. And, a SpaceX rocket recently exploded shortly after launch.
